Equities Sector Coverage: Wall Street Tests New Highs

Sector Recap |

Wall Street Bulls EyeOn Tuesday Greece received a commitment to a $170 billion bailout but stocks slipped on the news. Dow Futures were up 72 points on Monday with NASDAQ Futures up 10.5 points, but these levels were not sustained at Tuesday’s open. The Dow Jones Industrial Average traded up to 13,005.04, but traded as low as 12,926.11 in afternoon trading. The NASDAQ rebounded to 2965.05 but traded as low as 2934.07 in afternoon trading. The S&P 500, Dow Transports and Russell 2000 continue to lag their 2011 highs at 1370.58, 5627.85 and 868.57 respectively.

Asian stocks were mixed on Monday with the Nikkei 225 ending their session 9,485 – up 1.08% on the day. The Hang Seng closed at 21,425 – down 0.31% on the day. Then on Tuesday, Japan reported a record trade deficit and the Nikkei 225 ended Tuesday at 9,463 – down 0.23%. The Hang Seng ended Tuesday at 21,479 – up 0.25%. European stocks were also higher on Monday in anticipation of the Greek bailout. The FTSE 100 ended their session at 5,945 – up 0.68% on Monday; the DAX ended their session at 6,948 up 1.46% on Monday; and the CAC 40 ended their session at 3,473 – up 0.96% on Monday.

The FTSE 100 ended Tuesday at 5,928 – down 0.29%; the DAX ended Tuesday at 6,908 - down 0.58%; and the CAC 40 ended Tuesday at 3,465 – down 0.21%. The US Treasury market was closed on Monday. On Tuesday the yield on the 10-Year US Treasury rose to 2.080 trending above its 50-day simple moving average at 1.940. Gold rose to $1739.0 the Troy ounce on Monday then tacked onto that gain to $1759.5 on Tuesday. Crude oil traded up to $105.44 per barrel on Monday and that rally continued to $106.07 on Tuesday. The euro versus the dollar rallied to 1.3292 on Tuesday.

Energy

URS Corp (URS) agreed to buy Canadian oilfield services company Flint Energy Services (FESVF) for C$1.25B ($1.25B) (C$25/share – a 68% premium). Frontline (FRO) is increased to Outperform from Market Perform at FBR Capital.
Energy Select Sector SPDR (XLE) was trading at $75.38 at 4:00 PM on Tuesday, up 0.68% on the day – up 9.04% year-to-date. The January change was +2.26%. The 2011 change was -1.29%

Big Movers: WFT (-12.5%), FRO (+7.5%), CJES (+7%)

Materials

Hecla Mining (HL) reported Q4 EPS of $0.07 (in-line), while beating revenue by $4M. Walter Industries (WLT) missed estimates by 25 cents and revenue by $36M. The company reports prelim Q4 pre-tax income of $254M, or $352M after excluding pre-tax losses of $98M and revenue of $3.71B. Sappi Limited (SPP) is upgraded to Outperform from Neutral at Credit Suisse.
The Materials Select Sector SPDR (XLB) was trading at $37.59 at 4:00 PM on Tuesday, up 0.59% on the day – up 12.21% year-to-date. The January change was +10.99%. The 2011 change was -12.78%.

Big Movers: HL (+11.75%), SWC (8.25%)

Industrials

Airline shares fell broadly on Tuesday as the price of oil rallied, which directly influences the cost of jet fuel. URS Corp (URS) agreed to buy Canadian oilfield services company Flint Energy Services (FESVF) for C$1.25B ($1.25B) (C$25/share – a 68% premium). Dollar Thrifty Automotive Group (DTG) beat estimates by 34 cents with revenue in-line with estimates. Q4: Vehicle rental revenue up 1%, led by a 5.2% increase in rental days that partially offset a 4% decline in revenue per day. The company expects full year 2012 EPS to fall in a range of $4.60-$5.20 based on an improving U.S. travel market. Pentair (PNR) is added to Citigroup’s list of Top Picks Live. General Electric (GE) is removed from Citigroup’s Top Picks Live List. Norfolk Southern (NSC) and rival CSX Corp (CSX) are both reduced to Neutral from Overweight at JP Morgan.

The Industrial Select Sector SPDR (XLI) was trading at $37.41 at 4:00 PM on Tuesday, up 0.35% on the day – up 10.84% year-to-date. The January change was +7.32%. The 2011 change was -3.21%.

Big Movers: LCC (-12.5%), UAL (-11.5%), DAL (-11.25%), JBLU (-9.75%)



Consumer Discretionary

China's clampdown on automobile overcapacity is good news for companies like GM (GM) which already have entrenched positions in the world's biggest car market. Barnes & Noble (BKS) reported FQ3 EPS of $0.71 (versus consensus of $0.96), while missing revenue by $90M. Clear Channel Outdoor (CCO) missed estimates by 4 cents with revenue in-line with estimates. Macy's (M) Q4: Operating income jumped 12% Y/Y to $1.28B. Online sales +4% Y/Y. Sees same-store sales growth of approximately 3.5% in 2012 and EPS falling in range of $3.25 to $3.30. Saks (SKS) beat estimates by 3 cents with revenue in-line with estimates. Dana Holding (DAN) beat estimates by 4 cents with revenue in-line with estimates. Cracker Barrel (CBRL) beat estimates by 7 cents and revenue by $15M. Boyd Gaming (BYD) missed estimates by 2 cents, while beating revenue by $9M. RadioShack (RSH) reported Q4 EPS of $0.12 (in-line) on revenue of $1.39B (in-line). Home Depot (HD) beat estimates by 7 cents and revenue by $500M. Q4: Comparable store sales were 5.7%, with U.S. stores increasing sales at 6.1%. The company sees sales growth in 2012 of 4%, with low single-digit sales gains in comparable stores. Dangdang (DANG) gets increased to Outperform from Neutral at Credit Suisse. Garmin (GRMN) is upgraded to Outperform from Market Perform at Avondale. Limited (LTD) is now Neutral from Positive at Susquehanna. Marriott International (MAR) is moved to Neutral from Overweight at Atlantic Equities. Host Hotels (HST) is now Equal Weight from Overweight at Morgan Stanley. Under Armour (UA) is now Hold from Buy at Needham.

The Consumer Discretionary Select Sector SPDR (XLY) was trading at $42.81 at 4:00 PM on Tuesday, down 0.35% on the day – up 9.71% year-to-date. The January change was +5.89%. The 2011 change was +4.30%.

Big Movers: BYD (-8.75%), RSH (-8.25%)

Consumer Staples

Wal-Mart (WMT) said yesterday that it had lifted its stake in Chinese e-commerce firm Yihaodian to around 51% as the company angles for a larger presence in China's fast-growing consumer market. Kraft's (KFT) Q4: Organic net revenues grew 6.1%, led by higher pricing across segments and significant contributions from new products. The company expects Organic net revenue growth of approximately 5% in 2012, with EPS growing at least 9%. Wal-Mart (WMT): Q4 comparable store sales +1.5%, +0.2% for the year. Full-year stock repurchases of $6.3B. The company issued Q1 EPS guidance of $1.01-1.06 vs. $0.98 previous year and FY2013 EPS guidance of $4.72-4.92 vs. $4.90 expectations. Heineken (HINKY) gets a Hold-from-Sell hoist at Société Générale.

The Consumer Staples Select Sector SPDR (XLP) was trading at $32.87 at 4:00 PM on Tuesday, down 0.57% on the day – up 1.17% year-to-date. The January change was -1.42%. The 2011 change was +10.85%.

Big Movers: FEED (+45%), PBH (+22%).

Health Care

Pfizer (PFE) is exploring partnerships with more Chinese drug companies as it tries to expand its marketshare in generic drugs, and reported progress over the weekend in a planned JV with China's Zhejiang Hisun Pharmaceutical. Medtronic (MDT) reported FQ3 EPS of $0.84 (in-line), while missing revenue by $70M. Mylan Laboratories (MYL) beat estimates by 3 cents with revenue in-line with estimates. Cumberland Pharmaceuticals (CPIX) is moved to Outperform from Market Perform with Wells Fargo. Life Technologies (LIFE) is lifted to Buy from Neutral at Citigroup. Pharmacyclics (PCYC) is upgraded to Outperform from Sector Perform at RBC Capital. Gilead Sciences (GILD) is lowered to Equal Weight from Overweight at Barclays.

The Health Care Select Sector SPDR (XLV) was trading at $35.98 at 4:00 PM on Tuesday, down 0.72% on the day – up 3.72% year-to-date. The January change was +3.20%. The 2011 change was +10.32%.

Big Movers: CORT (+48.5%), GTXI (-33.75%), VVUS (-9.5%)

Financials

Chesapeake Lodging Trust (CHSP) is raised to Outperform from Sector Perform at RBC Capital. Unum Group (UNM) is moved to Overweight from Neutral at JP Morgan.

The Financial Select Sector SPDR (XLF) was trading at $14.775 at 4:00 PM on Tuesday, down slightly on the day – up 13.65% year-to-date. The January change was +8.12%. The 2011 change was -18.50%; the weakest performing sector for the year.

Big Movers: RDN (+8%)
Heavily Traded Stocks: BAC (+2.1%), C (+1.5%), WFC (+0.7%), JPM (+0.75%)

Information Technology

Reliance Communications is reportedly in talks with four companies about a possible $3B contract to manage its mobile phone networks, with a finalized contract expected in the next six weeks. The companies include: Ericsson (ERIC), Alcatel-Lucent (ALU), ZTE Corp. (ZTCOF) and Huawei Technologies. Samsung (SSNLF) announced plans to spin off its unprofitable LCD business to focus on more profitable areas such as smartphones, non-memory chips, and next-generation panels. Advanced Energy Industries (AEIS) is now Buy from Neutral at Citigroup. MicroStrategy (MSTR) is moved to Market Perform from Underperform by brokerage Raymond James. Oracle (ORCL) is moved to Market Perform from Market Outperform at JMP Securities. Lam Research (LRCX) and KLA-Tencor (KLAC) are each now Neutral from Overweight at JP Morgan. Infosys (INFY) is cut to Neutral from Outperform at Credit Suisse. OmniVision (OVTI) is lowered to Neutral from Buy at Lazard.

The Technology Select Sector SPDR (XLK) was trading at $28.64 at 4:00 PM on Tuesday, up 0.42% on the day – up 12.53% year-to-date. The January change was +6.21%. The 2011 change was +1.03%.

Big Movers: ENER (-21%), PWAV (+14.25%), FFN (+10.25%)

Telecommunication Services

The NASDAQ Telecommunications Index (IXTC) was trading at $218.63 at 4:00 PM on Tuesday, down 0.19% on the day – up 11.02% year-to-date. The January change was +6.67%. The 2011 change was -12.62%.

Heavily Traded: FTR (-3.75%), T (1.1%), S (flat), VZ (flat), CTL (+0.5%)

Utilities

The Utilities Select Sector SPDR (XLU) was trading at $34.92 at 4:00 PM on Tuesday, down 0.37% on the day – down 2.95% year-to-date. The January change was -3.61%. The 2011 change was +14.81%; the strongest performing sector for the year.

Heavily Traded: DUK (flat), GEN (+0.9%), EXC (-0.6%). NVE (-2.25%), AES (+0.4%), CNP (+0.2%)

STOCKS: URS, FESVF, FRO, WFT, CJES, HL, WLT, SPP, SWC, DTG, PNR, GE, CSX, LCC, UAL, DAL, JBLU, GM, BKS, CCO, M, SKS, DAN, CBRL, BYD, RSH, HD, DANG, GRMN, LTD, MAR, HST, UA, WMT, KFT, HINKY, FEED, PBH, PFE, MDT, MYL, CPIX, LIFE, PCYC, GILD, CORT, GTXI, VVUS, CHSP, UNM, RDN, BAC, C, WFC, JPM, ERIC, ALU, ZTCOF, SSNLF, AEIS, MSTR, ORCL, LRCX, KLAC, INFY, OVTI, ENER, PWAV, FFFN, FTR, T, S, VZ, CTL, DUK, GEN, EXC, NVE, AES, CNP

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
SPP Sanchez Production Partners LP 14.50 0.10 0.69 42,000
ORCL Oracle Corporation 45.09 0.26 0.58 2,436,029 Trade
GEN Genesis Healthcare Inc. 1.93 0.08 4.32 107,035 Trade
FTR Frontier Communications Corporation 1.39 0.02 1.46 3,782,934 Trade
CJES C&J Energy Services Ltd. n/a n/a n/a n/a
UAL United Continental Holdings 80.11 1.17 1.48 884,649 Trade
GE General Electric Co 27.78 -0.06 -0.20 12,132,669 Trade
CORT Corcept Therapeutics Incorporated 11.81 -0.32 -2.64 432,835 Trade
CHSP Chesapeake Lodging Trust of Beneficial Interest 23.44 -0.35 -1.47 36,830 Trade
SWC Stillwater Mining Company ($0.01 Par Value) n/a n/a n/a 0 Trade
WMT Wal-Mart Stores Inc. 78.32 0.17 0.22 2,633,450 Trade
CSX CSX Corporation 52.98 0.65 1.24 2,707,077 Trade
CNP CenterPoint Energy Inc (Holding Co) 28.07 0.10 0.34 838,158 Trade
UEIC Universal Electronics Inc. 62.60 0.15 0.24 8,874 Trade
BYD Boyd Gaming Corporation 25.06 -0.10 -0.40 424,386 Trade
GRMN Garmin Ltd. 51.79 0.30 0.57 146,499 Trade
C Citigroup Inc. 61.86 -0.41 -0.66 6,122,285 Trade
S Sprint Corporation 8.33 0.16 1.90 6,468,802 Trade
DAL Delta Air Lines Inc. 49.51 0.64 1.31 2,794,619 Trade
RDN Radian Group Inc. 16.39 -0.20 -1.21 248,530 Trade
DAN Dana Holding Corporation When-Issued 20.07 -0.17 -0.84 843,463 Trade
GILD Gilead Sciences Inc. 64.63 0.32 0.49 2,435,759 Trade
UA Under Armour Inc. Class A 18.03 -0.09 -0.47 1,443,482 Trade
CCO Clear Channel Outdoor Holdings Inc. Class A 3.70 -0.10 -2.63 47,558 Trade
AEIS Advanced Energy Industries Inc. 76.86 -0.87 -1.12 116,910 Trade
JPM JP Morgan Chase 85.22 -0.49 -0.57 4,846,213 Trade
LRCX Lam Research Corporation 153.35 0.47 0.31 808,250 Trade
BKS Barnes & Noble Inc. 6.84 0.14 2.06 329,496 Trade
ERIC Ericsson 7.04 0.05 0.64 2,501,713 Trade
AES The AES Corporation 11.71 -0.04 -0.34 1,564,468 Trade
PNR Pentair plc. 66.14 -0.45 -0.68 123,542 Trade
JBLU JetBlue Airways Corporation 22.85 0.48 2.12 1,981,700 Trade
MAR Marriott International 106.48 0.60 0.57 692,636 Trade
VZ Verizon Communications Inc. 45.34 0.30 0.67 5,316,477 Trade
MSTR MicroStrategy Incorporated 181.35 -0.64 -0.35 27,468 Trade
M Macys Inc. 23.45 0.27 1.14 3,030,988 Trade
GM General Motors Company 32.42 -0.78 -2.35 20,086,906 Trade
MDT Medtronic plc. 85.80 1.10 1.30 3,076,324 Trade
HST Host Hotels & Resorts Inc. 18.01 -0.20 -1.10 2,043,618 Trade
BAC Bank of America Corporation 23.27 -0.10 -0.41 28,113,579 Trade
DANG E-Commerce China Dangdang Inc. American Depositary n/a n/a n/a 0 Trade
GTXI GTx Inc. 4.03 -0.27 -6.28 14,489 Trade
WFT Weatherford International plc (Ireland) 5.06 -0.26 -4.89 7,618,260 Trade
OVTI OmniVision Technologies Inc. n/a n/a n/a 0 Trade
HL Hecla Mining Company 5.92 -0.05 -0.76 1,488,514 Trade
CTL CenturyLink Inc. 24.88 -0.08 -0.32 2,792,990 Trade
VVUS VIVUS Inc. 1.12 0.02 1.37 267,323 Trade
UNM Unum Group 45.52 0.13 0.29 333,390 Trade
CPIX Cumberland Pharmaceuticals Inc. 7.01 -0.02 -0.28 803 Trade
FRO Frontline Ltd 6.01 -0.11 -1.80 332,939 Trade
HD Home Depot Inc. (The) 156.30 1.30 0.84 1,516,978 Trade
PFE Pfizer Inc. 32.09 0.04 0.12 8,116,750 Trade
ALU Alcatel-Lucent ADR (Sponsored) n/a n/a n/a 0 Trade
WFC Wells Fargo & Company 52.63 -0.47 -0.88 6,386,345 Trade
KLAC KLA-Tencor Corporation 104.45 1.17 1.13 249,905 Trade
PBH Prestige Brand Holdings Inc. 50.07 0.10 0.20 68,984 Trade
LIFE aTyr Pharma Inc. 3.50 0.00 0.00 16,143 Trade
CBRL Cracker Barrel Old Country Store Inc. 166.79 2.48 1.51 85,273 Trade
EXC Exelon Corporation 35.85 0.04 0.11 1,159,912 Trade
INFY Infosys Limited American Depositary Shares 15.62 0.42 2.73 3,289,140 Trade
T AT&T Inc. 38.27 0.12 0.31 5,011,826 Trade
DUK Duke Energy Corporation (Holding Company) 84.92 0.23 0.27 739,101 Trade
MYL Mylan N.V. 39.52 0.34 0.87 1,779,835 Trade

Comments

Emerging Growth

DynaCERT Inc.

DynaCERT Inc is engaged in the assembling, distributing and installation of a patent pending transportable hydrogen generator after-market product, for use in the heavy tractor-trailer industry and into large stationary…

Private Markets

Initial State

Initial State is an Internet of Things (IoT) data analytics & data management platform company. We turn sensor and event data into information that matters by making it easy to…

Ozobot by Evollve Inc

Ozobot is a world leader in compact super intelligent robots that entertain and educate through fun interactive gaming.